Apple gets away from paying back taxes in Ireland

[dalekphalm]

14 minutes ago, RejZoR said:

Of course it's not, but I've been implying that system is broken to allow something this fucked up that just makes the richer even more rich. And because they are so big they just get even more rich on top of being more rich. Your small business or even you personally can't evade taxes like that on any level and they'll hunt you down and slap every last coin out of your pockets if you don't pay all of it when they demand their cut. But one of the richest companies in the world pays hilariously small taxes. It just stinks of pure rot. It's why rich are rolling in cash and everyone else is basically fucked. Just look at society in general, not just USA. Unless you're really loaded you can't really afford anything. Buying that 5000€ gaming PC is nothing and can't even be set as an example since we kinda understand that the best over here. Try building your own house or some shit. You'll piss away 5000€ just when you step into the county office to get the papers that would just start the process of making the land ready for construction. For which you'll pay ridiculous price per m2 unless it's in some nowhere where it's worth nothing. And then everyone wonders why people live with parents and don't have kids. Gee, I wonder why... Go 50 or 70 years back in time and everyone built own house basically as they left school, had cool jobs without a problem, own car, bunch of kids. Yeah...

I don't disagree that the system has flaws - particularly taxation among larger corporations.

 

The problem is that unless all nations agree on how to solve that system, solving it locally actually harms your local economy.

 

Eg: US forces Amazon to pay more taxes. Amazon moves HQ to a tax haven in response.

 

There are sometimes ways around that - taxing more at the import or sale stage instead of the corporate tax stage, etc. But there are cons with that too.

 

Until (if) a unified global government is created, there will always be a country willing to sacrifice corporate tax rates and create incentivizing loopholes in exchange for other benefits of having that corporation operate in their country.

 

However, if enough countries "agree" to some kind of global framework, it would go a long way to minimizing those situations.

 

Example: If the EU, the US, and the Commonwealth all agreed to similar corporate taxation rules, that would cover a sizeable chunk of the world. Add in a SEA consortium of countries (does one already exist? I'm not sure), that would cover most of the rest.

[CarlBar]

13 hours ago, valdyrgramr said:

Apple can dodge a tax yet they can't dodge a hax

 

Corrected that for you.

[justpoet]

There are many people arguing who really don't get how taxation works multinationally.

 

I'm not the one to give a detailed lesson on this, but there are a few key points that should help people get the basics.

 

1) One doesn't need to put global revenue into any specific place, with the exception of allowing it to all come to where their HQ is.  For reference for Apple, that is Cupertino, CA, USA.  Companies may keep revenue in a given place it was made (for example, Apple would keep chinese revenue in china, to then use to pay for manufacturing without cross border taxation to multiple countries, or in the EU to pay developers and data center costs, etc).

2) The EU tax laws allow it to work as a single unit, where any EU country may be the tax base for all EU revenue.  To try and get a larger bit of the tax pie, the EU also allows for other countries to go through the EU as its base.  So, countries that don't tax revenue, but rather just the goods/imports, naturally go through a place like the EU.

3) Ireland purposely has one of the lowest corporate tax rates in the EU, which is why many companies that do business in the EU have their EU HQ in Ireland, and put sales for some other countries through the EU.

4) The member countries pay a portion of their collected taxes into the EU as a whole.  This is why the EU is annoyed at Ireland here, and the only reason they have any say in the matter.

5) Apple has also done development in Ireland to increase their local footprint (and therefor local tax base) as well as with things like solar farms towards Ireland's infrastructure, which is why Ireland would want to cut them an additional deal.

 

So, the real issue here is that the EU isn't as much of a united union as they desire, yet they treat many of their laws (such as any EU base is ok for an EU tax center) as if they are.  All the multi-national companies do this, btw.  Apple was just picked because it has the highest revenues, and the EU was hoping to see $$.  Ireland is naturally the defender here, because they want to keep more autonomy in taxation choices for people and companies in Ireland vs handing it all to the EU.

 

To help explain to US folks, you only MUST pay state sales tax online if the company also has physical presence in the state, yet places like California and MA require their citizens to pay that state sales tax on all of their purchases from anywhere online (even over seas), but if I buy from a CA or MA business while not in their state, that tax can't be charged by CA or MA because of how interstate commerce and tax laws currently work (based on location of purchaser, rather than on location of business).  Same concept, but opposite, since it is the purchaser rather than the business being taxed.

 

Corporate tax is based on the location(s) of the business.

 

So, unless you're in the habit of purposely trying to jump to the next tax bracket and pay the higher (usually optional) AMT tax rate because you want to give the government more money than you're required…or purposely moving to states with the highest tax rates so you can contribute more…then you're being hypocritical to expect others like Apple, Intel, AMD, nvidia, HP, Lenovo, IBM, Dell, etc...to do so.

 

Also note that if the EU didn't allow Ireland to have that lower tax rate, and have their various tax treaties with other countries, the EU would have less of an international revenue pie to tax out of, so they'd likely actually make less in taxes in the long run by limiting themselves to EU only.

[SpaceGhostC2C]

10 hours ago, justpoet said:

 

4) The member countries pay a portion of their collected taxes into the EU as a whole.  This is why the EU is annoyed at Ireland here, and the only reason they have any say in the matter.

This is incorrect; as I explained earlier, the EU also regulates taxes and subsidies to companies on the basis of competition policy.

 

10 hours ago, justpoet said:

So, the real issue here is that the EU isn't as much of a united union as they desire, yet they treat many of their laws (such as any EU base is ok for an EU tax center) as if they are.  All the multi-national companies do this, btw.  Apple was just picked because it has the highest revenues, and the EU was hoping to see $$.

This is also incorrect. Ireland (not Apple) was picked with respect to its treatment of Apple because the EU considered it benefited from a specific, individualized tax treatment that, according to the Commission, Ireland cannot grant to any company. Apple was involved as the beneficiary of a policy that the Commission believed to violate EU rules.

 

10 hours ago, justpoet said:

 Ireland is naturally the defender here, because they want to keep more autonomy in taxation choices for people and companies in Ireland vs handing it all to the EU.

The Irish government is naturally the defendant as what's being questioned is one of its decision; obviously they wouldn't have taken the decision under review if they didn't believe its best for them in the best place, hence the appeal.

Attaching an idea of "more autonomy" to this is a debatable political interpretation to say the least; certainly leaving the EU makes much more sense in terms of autonomy rather than willfully remaining a member but fighting the application of its rules in court.

 

[Trik'Stari]

Interesting considering what happened a few years ago with the "Tax Rebellion in the UK" article I posted on here, and was featured in the WAN show

 

Shameless self promotion:

Link

 

So I did some follow up on it a while ago, and from what I could find on it, the small businesses in question got paid off to drop the matter, which is a damned shame. I find it interesting because in that instance, you have a government giving tax breaks, and here we have a government angry about tax breaks.

 

Full disclosure: I define "fair share of taxes" to be "as little as humanly possible, for everyone, whether they be a big or small business, or an individual citizen".

 

I'm torn between my dislike of Apple and their business practices being blatantly anti-consumer rights, and my Grinch-like attitude towards taxation.

 

My opinion is largely based on the fact that I work as a contractor for medium sized government entities, and I can absolutely say that they waste more money than a drunken teenager with his dads credit card, playing fortnite.

[mr moose]

In a free market what apple have done is fine, it is neither unethical nor dangerous in that Ireland have secured a growth in their economy by doing what they did.   On the other hand Governments need to work out how to close 'offshore tax havens' , something that this thread has already raised as the chief problem and I agree the solutions are few and far from perfect.

 

On 7/16/2020 at 2:23 AM, Zodiark1593 said:

Question: If the EU forbade the practice, and Ireland still allowed substantial tax breaks anyway in violation, would Apple be responsible for the back taxes, or Ireland for violating the law?

Applying laws retrospectively is a very dangerous precedent to set.   So I would sincerely hope not.    other wise there is nothing stopping new tax laws from being applied retrospectively and me getting a tax bill for exemptions that were perfectly legal back when I claimed them.

 

[Kisai]

What is legal, isn't always right, and what is right isn't always legal.

 

Apple was doing something legal, but probably not right. Many corporations and rich multi-millioniaire/billionaires do this, because they can.

 

I'd encourage people to watch "The Laundromat" https://www.nytimes.com/2019/10/16/movies/panama-papers-laundromat-netflix.html , because it certainly burned some real businesses, accusing them of being fronts for crime.

Quote

The law firm has sued Netflix for libel, invasion of privacy and trademarks violations, arguing that the law firm’s logo is placed in scenes that “allow viewers to associate it with very serious criminal and unethical behavior.” It is asking a judge to order that Netflix stop the film from being released for streaming.

The Panama thing was about banking privacy. 

 

Yet, this is the exact behavior that large companies like Apple and Amazon also engage in. They put their HQ in places that have lax taxation policies, thus they front their EU profits to the low tax regime and don't have to pay the kinds of taxes if they were say, in France (which is a high tax regime.)

 

Hide the billions and then when the taxman says "pay me" you claim you made no money, your LLC manages your assets and shields you from liability. You know who has accounts in the Panama papers? The Chinese president. The Russian President, former UK PM's, etc. Something is kinda wrong here when leaders of heavily corrupt nations need to shield their assets from their constituents. So what does that say about businesses that do the same?

 

Right the wrongs by fixing the tax laws so that neither businesses or individuals can hide the source of their income, and things will be fixed, but good luck clawing back the years of mistakes. All you can do is shame people and companies into doing better.